Essential Utilities, Inc. · NYSE:WTRG
Essential Utilities — Q1 2024 Earnings Presentation
29 slides from Essential Utilities's earnings presentation, May 3, 2024
Slide 1: First Quarter 2024
NYSE LISTED First Quarter 2024 WTRG May 3rd, 2024 February 2024
Slide 2: Brian Dingerdissen, Investor Relations
Brian Dingerdissen Vice President, Investor Relations and Treasury 2
Slide 3: Forward Looking Statement
Forward Looking Statement This presentation contains in addition to historical information, forward looking statements based on assumptions made by management regarding future circumstances over which the company may have little or no control, that involve risks, uncertainties and other factors that
Slide 4: Christopher Franklin, Chairman and CEO
Christopher Franklin Chairman and Chief Executive Officer 4
Slide 5: Corporate Updates
Corporate Updates $0.97 Earnings Completed Sale Regulatory Progress on of the Three District PA FMV Reform Per Share(1) Energy Projects Appointment of EPA’s First-Ever Infrastructure Tamara Linde Limits on PFAS in Investment of $253.0M and Christopher Water Bruner to Board 5 1) Includes the gain on
Slide 6: Solidifying the Strength of Our Board
Solidifying the Strength of Our Board Tamara L. Linde Christopher L. Bruner Executive Vice President and General Partner, Ernst & Young Counsel, PSEG (Retiring 12/2024) • Ms. Linde has over 30 years of experience in various • Mr. Bruner has over 35 years of experience in various roles with responsib
Slide 7: Industry-leading approach to PFAS
Aqua Started Testing and Recent Addressing Completion PFAS for of PFAS More than Treatment Industry- Facility in NJ Five Years leading approach to PFAS Voluntary mitigation Reporting of PFAS Test Results in Water Quality Reports 7
Slide 8: Mike Huwar, President, Peoples
Mike Huwar President, Peoples 8
Slide 9: Targeting ~10% Rate Base CAGR
Targeting ~10% Rate Base CAGR 1 LOCATED IN CONSTRUCTIVE REGULATORY JURISDICTIONS OPERATIONAL EXCELLENCE Proprietary Storage OUTSTANDING HAZARDOUS LEAKAGE RECORD Reduction of over 80% of gas leaks outstanding at year end 2023 since 2019 LEADING MILE REPLACEMENT PROGRAM IN PA Large scale modernization
Slide 10: Peoples Natural Gas Rate Case Details
Case Details Filed: Revenue: Equity: 12/29/2023 $671.5M 54.67% Rates Expected: Increase: ROE: October 2024 $156.0M, or 18.7% 11.75% Peoples Rate Base through the Fully-Projected Future Test Year as of 9/30/2025: $4.2B up from $2.1B in last case Natural Gas Overview of Pennsylvania Significant Benefi
Slide 11: Increasing Safety and Limiting Risk with Focus on the Customer
Increasing Safety and Limiting Risk with Focus on the Customer Long-Term Infrastructure Operational Improvements through Improvement Plan (LTIIP) Technology Initiatives Current Phase of LTIIP Safety Improvements • Covers from 2021 to 2025 • Advanced metering technology • Targets 870 miles of replace
Slide 12: Daniel Schuller, Chief Financial Officer
Daniel Schuller EVP, Chief Financial Officer 12
Slide 13: Q1 Financial Highlights
Q1 Financial Highlights As of March 31, 2024 ($ in millions, except per share data) Q1 2023 Q1 2024 Revenues • Lower purchased gas costs and other items Operating Revenues $726.5 $612.1 were the main drivers of the revenue decrease for the quarter; offset by additional Purchased Gas $256.3 $129.7 re
Slide 14: Operating Revenues
Operating Revenues Q1 2024 vs. Q1 2023 Change in Operating Revenues (millions) 14
Slide 15: Operations & Maintenance Expenses
Operations & Maintenance Expenses Q1 2024 vs. Q1 2023 Change in Operations & Maintenance Expense (millions) 15
Slide 16: Earnings per Common Share
Earnings per Common Share Q1 2024 vs. Q1 2023 Change in Earnings Per Share Includes $66M after-tax one-time gain on sale 16
Slide 17: Regulatory Activity
Regulatory Activity As of May 1, 2024 2024 COMPLETED PENDING REGULATORY REGULATORY RECOVERIES RECOVERIES Water segment base rate cases or Water segment base rate cases or surcharges in IL, NC, OH and PA with surcharges in IL, NJ, TX and VA with annualized revenue increase of requested annualized rev
Slide 18: Christopher Franklin, Chairman and CEO
Christopher Franklin Chairman and Chief Executive Officer 18
Slide 19: Pending Municipal Transactions
Pending Municipal Transactions ~$385M of Pending Rate Base is Expected to Generate ~$19M of Incremental Annual Earnings Potential(1) Over 215,000 (2) Total Customers PA PA PA DELCORA BEAVER FALLS GREENVILLE • Wastewater • Wastewater • Wastewater ~$385.0M • 198,000 customers(2) • 7,600 customers(2) •
Slide 20: Guidance Outlook
Guidance Outlook FY 2024 net Infrastructure Regulated $1.3 to $1.4B income per diluted investments of utility rate base infrastructure Growth Targets common share CAGR of 8% investment for ~$7.2B,weighted target of towards regulated through 2028 2024 $1.96 - $2.00(1) water through 2028 Segment rate
Slide 21: Questions
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Slide 22: For More Information Contact
For More Information Contact: Brian Dingerdissen Vice President, Investor Relations and Treasury (610) 645-1191 BJDingerdissen@Essential.co 22
Slide 23: Appendix
Wessentia 23
Slide 24: Regulatory Activity Completed
Requested Annualized State Docket Number Segment Type Revenue Increase ($thousands) Water Rate Case $1,569 Ohio 22-1094-WW-AIR Water Rate Case $4,498 22-1096-ST-AIR Wastewater Rate Case $352 Indiana Wastewater Rate Case $134 Water Surcharge $1,352 Illinois Wastewater Surcharge $567 Virginia PUR-2022
Slide 25: Regulatory Activity Completed 2024
Requested Annualized 2024 State Docket Number Segment Type Revenue Increase ($thousands) Regulatory Ohio North Carolina W-218, Sub 573 Water Water Rate Case Rate Case – Year 2 $1,627 $2,632 Activity W-218, Sub 573 Wastewater Gas Rate Case – Year 2 Surcharge $1,111 $(256) Completed Pennsylvania M-202
Slide 26: Regulatory Activity Pending
Requested Annualized State Docket Number Segment Type Revenue Increase ($thousands) 22-0044 Water Rate Case $10,741 Illinois 22-0044 Wastewater Rate Case $8,455 Regulatory PUR-2023-00073 Water Rate Case $5,215 Activity Virginia PUR-2023-00073 Wastewater Rate Case $1,696 Pending New Jersey Water Rate
Slide 27: State by State Comparison of Services
Rate Base Water Wastewater Total State ($000s) Connections Connections Customers PA $4,401,939 456,018 62,161 518,179 IL $529,015 69,722 24,408 94,130 OH $520,738 152,788 11,306 164,094 TX $558,134 74,088 23,454 97,542 NC $363,285 86,504 22,869 109,373 State by State NJ $259,339 55,775 6,779 62,554
Slide 28: Healthy Balance Sheet Supports Equity Requirements
Healthy Balance Sheet Supports Equity Requirements STABLE CREDIT SELECT CREDIT RAISING EQUITY RATINGS TARGETS TO SUPPORT LONG-TERM GOALS DEBT-TO-CAPITAL RATIO 50-55% To support long-term Baa2 Baa2 targets, Essential Issuer Issuance DIVIDEND PAYOUT RATIO expects to raise 60-65% $250M through an ATM p
Slide 29: Customers: Water and Wastewater Acquisition Success
Continued Water and Wastewater Acquisition Success Cumulative Additions of Customers 2023 Acquisitions Through Acquisitions Since 2015 PA OH PA NORTH HEIDELBERG UNION ROME SHENANDOAH 140,000 Nearly 129,000 (1) • Wastewater • 275 customers • Wastewater • 5,300 customers(1) • Water • 3,000 customers W